Gov. Kathy Hochul announced a sweeping affordability plan as part of her 2025 State of the State address, including middle-class tax cuts, the state’s first-ever inflation refund, and a major expansion of the child tax credit. The proposals are designed to address the rising cost of living and provide financial relief to millions of New Yorkers.
The tax cuts would reduce rates for more than 8.3 million taxpayers, offering nearly $1 billion in relief and bringing rates to their lowest level in almost 70 years. Taxpayers earning up to $323,000 for joint filers would see immediate savings, reflected in their paychecks starting this year. Hochul said the initiative aims to ensure working families keep more of their earnings at a time when many are struggling to make ends meet.
In addition to tax cuts, Hochul proposed New York’s first inflation refund, which would deliver $3 billion in direct payments to 8.6 million taxpayers by the end of 2025. Under the program, single taxpayers earning up to $150,000 would receive $300, while joint filers earning up to $300,000 would receive $500. Hochul said the refunds would help New Yorkers manage the rising costs of everyday necessities like food and clothing.
The governor’s plan also includes a historic expansion of the child tax credit, which would double or triple the current benefit for many families. Under the proposal, families would receive up to $1,000 annually per child under four and up to $500 per child aged four to 16. The changes would expand eligibility to middle-class families who were previously excluded, providing additional support to households earning up to $170,000. Hochul said the expanded credit would help reduce child poverty statewide by more than 8 percent.
Hochul’s affordability plan builds on her administration’s previous efforts to address the cost-of-living crisis. Since taking office, she has raised the state’s minimum wage, secured federal funding to expand affordable health insurance, reduced gas taxes, and capped out-of-pocket costs for insulin and EpiPens.
New York State Department of Taxation and Finance Acting Commissioner Amanda Hiller praised the proposals, saying they would deliver critical relief to working families and help improve financial stability for millions of residents.
Hochul emphasized her commitment to making New York more affordable and said the new initiatives are part of her broader effort to ensure the state remains a place where families can thrive. The proposals will require legislative approval to take effect.
